The use of VoIP to call landline and mobile phones in India is against the rules and Microsoft has been breaking those rules for a long time, he added.

Barring VoIP calls was one way for Indian regulators to protect the investments of telecommunications operators. Some VoIP service providers, however, routed internationally calls originating on the Internet in India, and then terminated the calls on landline or mobile networks within the country.

The ISPAI has maintained to both the Indian and U.S. government that just as Indian companies have to play by U.S. rules when they operate in the country, U.S. Internet companies must also play by local rules when operating in India, Chharia said.

Microsoft did not respond immediately to a question on whether the company had made changes to the Skype service as a result of government regulations. The company acquired Skype for US$8.5 billion in October 2011.

India’s Ministry of Communications could not be immediately reached after office hours.

The Indian government and local industry organizations have frequently grappled with U.S. companies to try and get them to abide by local laws. But local offices of Internet companies have typically argued that their services are provided by their principals in the U.S., over whom they don’t have control.

Microsoft said that the change only affects Skype calls to landlines and mobiles. “You can still make free Skype-to-Skype calls within India, and you can still call mobiles and landlines in India from outside the country (as well as make calls from India to other countries),” it added in the post.